OUTLINE FOR PROPERTY I : PREPARED BY J. William Snyder, Jr.
Text: Dukeminier & Krier, Property (2d ed. 1988).
Professor: Patti Solari
Term: Fall 1992
NOTE: This outline was originally prepared for my own private study, and it is
based primarily on my own class notes, handouts, and excerpts from the textbook,
either in paraphrase or direct quote. When possible, I tried to indicate
material that has been directly quoted, but it is possible that some material
from the textbook has been directly quoted without indication.
I. Types of property
1. Real property: land
2. Personal property
a. Tangible personal property (chattels)
b. Intangible personal property (stocks, trusts, accounts)
II. The Rule of Capture
A. General rule: One acquires property rights in a wild animal [or
something sufficiently analogous to a wild animal] if
one captures, traps, or mortally wounds the animal
(principle of first-in-time respected) (Pierson v. Post)
Dissent: pursuit with reasonable expectation of capture
confers property rights.
B. Wild animals
1. General rule applies in most cases of capture
2. Property rights are VOIDED if animal escapes
EXCEPTIONS:
a. animal has animus revertendi (in the habit of
returning)
b. rare animal exception
3. Owners of land have constructive possession over all wild
animals on their property, which generally voids the
rights of capturers who trespass and capture game.
4. Those who make their livelihood off of hunting are
generally protected from the unfair hindrance of other
though not from fair competition (Keeble v. Hickeringill)
C. Fugitive resources
1. Oil and Natural gas: split of authority
a. analogize to wild animals and apply the rules
applicable to wild animals (Hammonds v. CKNG)
b. OR in other jurisdictions, labeled minerals and
declared property of landowner.
2. Water
a. Groundwater: split of authority
(1) English rule: Absolute ownership- Draw as much water as you want,
and the hell with your neighbor.
(2) American rule: reasonable use- wasteful use that hurts
neighbors is inappropriate.
(3) Statutory and administrative regulations also may have something to
say about water use.
b. Surface waters: split of authority
(1) Western states: first in time principle called "prior
appropriation"; capture water an put it to reasonable use.
(2) Eastern states: riparian rights- land along a source of water;
owner get to draw and use the water subject to the rights of
other riparians.
III. Finders
A. General Rule: finder has title to found property against all but the
true owner and prior possessors (Armory v. Delamirie).
B. Nature of the property
1. lost
a. nature of the locus in quo
(1) public- apply general rule (Bridges v. Hawkesworth)
(2) private- owner/occupier gets it (McAvoy v. Medina)
b. relationship between the parties
(1) employer/employee relationship when employee is
acting within his course of employment.
(a) British Rule: servant finds for his master.
(b) US
1. majority: reject British rule
2. minority: apply British rule
3. independent contractor exception
2. Mislaid property
a. Definition- voluntarily placed but forgotten and left
b. Rule- goes to the owner of the locus in quo
3. Abandoned property
a. Definition- voluntarily left with no intent to recover
b. Apply the general rule- except in cases of trespass
4. Treasure trove
a. Definition: property concealed to be recovered at a
later time.
b. British rule: something of value hidden in the earth
(coin, money, gold, jewels, etc.)
c. Rules
(1) British rule: goes to the crown
(2) US rule: goes to the finder
5. Shipwrecks
a. Definition: ship sunk in the ocean
b. British rule: goes to the crown
c. US rule: split
(1) majority- goes to the finder
(2) minority- goes to state if found in its
territorial waters.
C. Damages
1. Measure of value
a. thing itself (replevin)
b. value of the thing (trover)
c. value of the finder's interest.
2. Responsibility of the finder to owner
a. negligence- gross negligence
b. misdelivery- split
(1) majority rule: strict liability
(2) minority rule: negligence
3. Liability between parties when a subsequent possessor pays the
finder.
a. Owner v. Finder: owner can recover
b. Owner v. Subsequent possessor: split
(1) majority rule- no cause of action
(2) minority rule- SP liable even if he has already
paid the finder, except in cases of subrogation
[?]
IV. Bailment
A. Definitions
1. Justice Story: "A delivery of a thing in trust for some
special object or purpose and upon a contract, express or
implied, to conform to the object or purpose of the trust."
2. Professor Wileston: "The rightful possession [of goods] by one
who is not the true owner for a limited purpose."
3. Possession, power, or control over an object with intent to
exercise that control and exclude others from interfering with
it.
B. Types of bailments
1. Sole benefit for bailor. i.e. "Take care of this for me while
I'm away."
2. Sole benefit for the bailee. i.e. Borrowing items.
3. Mutual benefit bailment. i.e. coat check
4. Some jurisdictions deem all bailments to be to some degree for
the mutual benefit of both parties.
C. Standard of care
1. B-1: slight care
2. B-2: extreme care
3. B-3: ordinary care
D. Liabilities
1. B-1: only for gross negligence
2. B-2: only for slight negligence
3. B-3: only for ordinary negligence
4. Cases of misdelivery-split
a. Majority- bailee strictly liable
b. Minority- apply standard of care for the appropriate
type of bailment.
5. Involuntary bailments and finders
a. A finder can be deemed a bailee of an item he finds, but
most of the time finders will not be regarded as
involuntary "gratuitous" bailees. Even in the case of
finders, there is probably some benefit to the finder.
b. A potential finder has no obligation to take a found
good into possession, but if she does, she becomes a
bailee to the true owner.
E. Goods damaged while bailed: Burden of proof- on the bailor
1. prima facie case
a. Was there a surrendering of the goods?
b. goods were undamaged before surrendering?
c. goods were damaged upon return?
2. Elements (Questions to ask)
a. Was there a bailment?
(1) rightful possession of goods
(2) intent to control
b. If so, what type of bailment? (B)
c. What was the standard of care? (C)
d. Was the standard of care breached? Did the care fall
below the standard?
3. Other considerations
a. Value of the object
b. Attractiveness to thieves
c. Ease of theft from place of storage
d. Special skills, abilities, knowledge on the part of the
bailee.
F. Misdelivery in those jurisdictions where bailees are held strictly
liable for misdelivery.
1. Elements (Questions to ask)
a. Was there a bailment?
(1) rightful possession of goods
(2) intent to control
b. Was there misdelivery?
G. Use of good by bailee
1. If there is an express agreement, then use may be pursuant to
the agreement
2. If no express agreement--> rules of reason apply
3. Bailee may be sued if he converts, sells, or damages the
goods.
H. Bailee's rights
1. Bailee may acquire title to bailed goods by adverse possession
should she meet the statutory conditions.
2. Other statutory provisions may afford bailees rights.
V. Adverse Possession (AP)
A. Definition: An unconventional means of acquiring title to land which
occurs when a person occupies and possesses another's land under
claim of right or color of title for a period of time set by the
applicable statutes.
AP is a mishmash of common and statutory law
1. Unconventional: as opposed to conventional methods of land
transfer.
a. deed
b. inheritance
(1) will (devise)
(2) intestate succession
2. Claim of right
a. an intent component
b. person using land intends to use it to the exclusion of
all others, especially the true owner
c. claim to have the right to possess, occupy, and use the
property
d. minority of jurisdictions in boundary disputes: look at
state of mind of the APer.
3. Color of title (COT)
a. Definition: a written instrument that purports to
transfer title but legally fails to do so (deed, will,
judgment, inaccurate deed, no title to pass, etc.)
b. COT usually shortens the SOL requirement
c. Constructive possession can be invoked.
4. Applicable statutes
a. Statute of limitations (SOL)
b. Disabilities provisions
c. AP against state SOL- usually the state has a longer SOL
in which to bring an action for ejectment or quiet
title.
d. Failure to act (bring ejectment or quiet title action)
within the statutory time period against an APer results
in the land being awarded to APer.
e. NC Statutory provisions regarding AP
(1) Statutes of limitations (SOL)
(a) 20 years for AP of private land w/o COT
(b) 7 years for AP of private land w/t COT
(c) 30 years for AP of State land w/o COT
(d) 21 years for AP of State land w/t COT
5. Considerations
a. Who owns/has record title to the land?
a. State? (SOL is usually longer)
b. Private owner (Shorter SOL)
b. COT (Shorter SOL)
c. What type of possession is required?
States vary on this point. NY is very specific
about the type of possession it requires.
d. Character of the land in question: what is its normal
use?
B. Elements
1. Hostile/Claim of Right/Claim of Title
- no permission to be on the land, but you claim it as
your own. "Hostile" means "adverse to the interest of
the true owner", and not "animosity"
a. intent
b. lack of permission
c. Permission VOIDS any AP rights, unless the one given
permission somehow puts the landowner on notice that he
is occupying the land under claim of right.
d. AP against landlord- 2 actions required
(1) repudiate the lease
(2) stop paying rent
e. AP against other cotenants
- Requires ouster: must actually tell other
cotenants to "get lost" and that they are no
longer welcome.
f. Vendee or grantee
(1) Under void deed satisfies hostile/claim of right
[fraud, maybe?]
(2) If no title to pass, its not so clear.
g. Bearing of the claimant's state of mind on cases of AP,
especially in the hostile/claim of right category
(1) Majority rule in US and Britain: Objective
standard- courts do not try to read minds. If all
the elements are met, then if the claimant used
the land as if he were the true owner, then he
gets it by AP. States of mind are irrelevant
(2) Minority rule- Subjective approach
- state of claimant's mind is relevant
(a) Good faith belief that land was his
(rewards ignorance)
(b) Larcenous intent- BAD faith is required-
had to know the land was not his. (Rewards
naughtiness/ hostility requirement taken
literally)
(c) Criticisms of the subjective approach
(1) difficult to establish state of mind:
very ambiguous and slippery.
(2) protracted litigation- looks away
from use of land
(3) larcenous intent rewards aggressive
trespassers and punishes good faith
claimants.
2. Actual possession
a. Real, physical possession of the land or some part of
it.
b. Making use of the land as
(1) the true owner would, or
(2) comports with the normal use of the land as
recognized by the community.
3. Open & notorious possession
a. Visible/Known to the public
b. Put the owner on notice (though he need not actually
know) that someone is occupying his land under claim of
right (constructive notice).
4. Exclusive possession
- possessor shows that no one has interfered with the claim,
especially the true owner
5. Continuous and uninterrupted possession
- Look at the character or kind of the land to determine what
is required for continuous and uninterrupted possession.
6. O.C.H.E.A.N.
Open
Continuous
Hostile
Exclusive
Actual
Notorious
7. Successful APers may only get the interest the true owner had
in the land at the time they began APing the land.
a. If the true owner only possessed the land as a life
estate, then the APer get only the life estate, not
clear title to the land.
b. If APer starts APing land when it is possessed by a
person with clear title and that person later conveys
the land into a life estate and a remainder, APer is not
affected by this transfer. If he successfully APs for
the SOL and other applicable statutes, he will get clear
title.
C. Color of title
- if you have it, you have the property under claim of right
2 effects of COT
1. Shorter SOL time period (7 years in NC)
2. How the property must be possessed: may invoke constructive
possession and avoid the pitfalls surrounding actual
possession.
4 elements of constructive possession:
a. COT
b. SINGLE parcel or tract of land
c. Tract must be under SINGLE ownership
d. NO actual possession by another
D. Lappage (interlocker)
1. This occurs when two deeds describe an area that overlaps on both
tracts of land.
2. Who gets the lappage depends on possession
a. neither is in actual possession of the lappage: law
gives possession to the person who has better title (an
application of first in time)
b. Actual possession of any part of the lappage by one
party and no actual possession by the other party:
Actual possessor gets the entire disputed portion.
c. When both are in actual possession of some part of the
lappage, the party with better title gets all of the
lappage (by constructive possession) except that portion
actually possessed by the other party; the other party
gets it.
E. Tacking
1. Applying the time of occupation of other adverse possessors to
one's own claim for adverse possession.
2. Requires "privity of estate": mutuality of interest/ interest
derived from or dependent upon interest of previous
owner/occupier; third parties not party to the conventional
transfer cannot invade and have no interest in the privity.
a. intestate succession (ancestor-heir)
b. valid will (devisor-devisee)
c. title by deed (grantor-grantee)
d. Any other agreement, oral or written, where it can be
inferred that the prior possessor intended to transfer title
to subsequent possessor.
3. EXCEPTION: Trespassers may not tack the prior possession by
other trespassers. (Trespasser SP ousts Trespasser PP:
Trespasser SP cannot tack Trespasser PP's time of possession
on to his own time of occupation for the purposes of AP.
4. Ousting, tacking, and the SOL: When an APer is ousted by
another APer, and later the first APer ousts the subsequent
APer:
a. Majority rule: SOL is tolled (stopped) while A is out of
actual possession, since he did not abandon the property
b. Minority rule: SOL begins ticking and does not stop
F. Improvements and Encroachments
1. Improvement: a modification to the land that has the effect of
increasing its market value. It must be done entirely on the
land in question.
a. When APed land is improved, SOL has not run, and Owner
takes legal action against APer who has improved the
land, who gets the improvements or their value?
(1) General Rule: According to the common law, the
landowner gets ANY improvements
(2) Minority rule: trend towards moderation of the
harshness of the common law rule
(a) Betterment statutes: AP gets fair market
value (FMV) of the improvement
(b) Court will permit removal of the
improvement, if feasible
(c) Landowner choice
1. Sell land to improver, or
2. Pay improver for the improvement
2. Encroachment: Improvement which overlaps partially onto the
land of another.
a. Innocent (good faith mistake) encroachment
(1) The court will compare the hardship on the
encroacher to remove the encroachment, and
(2) The inconvenience to the landowner whose property
has been encroached upon.
b. Wilful encroachment
- remove the encroachment, regardless of the hardship
G. Disabilities
1. Definition: A legally recognized status which might excuse a
landowner for failing to bring an action for recovery of land
within the time set by the SOL.
2. Disabilities recognized
a. By most states:
(1) infancy/minority
(2) mental incompetence/insanity
b. By some states:
(1) imprisonment
(2) military service
3. Timing of the disability is CRITICAL: In most jurisdictions,
the disability must have existed at the time the cause of
action accrued.
4. NC disability provisions
a. For the following disabilities, a landowner has three
years from the date of removal of the disability to
bring the cause of action:
(1) Minority (under 18)
(2) Insanity
(3) Mental incompetence
b. For incarcerated persons, the SOL starts ticking on
January 1, 1976 and cannot be tolled again [disability
by reason of incarceration is being phased out].
c. Coexisting/Supervening disabilities: When multiple
disabilities exist concurrently at the time the COA
accrues, or one disability supervenes another existing
at the time of the cause of action accrued, the 3 year
SOL does not start ticking until they are all removed.
d. Subsequent or intervening disabilities: The disability
must exist at the time the cause of action accrued in
order to be availed of the disability provision. A
landowner cannot invoke the statute for a disability
arising after the cause of action accrued.
5. In some states, disability completely tolls the SOL, but in
other states like NC the SOL is not completely tolled.
6. Disability provisions are NEVER punitive. When a person's
disability is removed, that person gets either the time
remaining on the full SOL or the disability SOL, whichever is
greater.
H. AP of chattels
1. Generally speaking, the same principles that apply to AP of
real property also apply to AP of chattels- elements are the
same
2. Void vs. Voidable title
a. Void title: no title to begin with (thieves have no
title to transfer)
b. Voidable title
(1) Definition: item voluntarily transferred by owner
to subsequent possessor. (could be fraud,
entrustment, etc.)
(2) Holder of voidable title can pass good title to a
good faith purchaser for value.
(3) Procurement by fraud creates voidable title;
perpetrator can transfer good title to a bona
fide purchaser
(4) Bona fide purchaser has to be on notice (actual
or constructive) that the goods are stolen or
fraudulently procured for the transfer of good
title not to work.
3. O'Keefe v. Snyder
- Case history-judgments
a. trial court: COA/SOL accrued/started ticking at
the time of the theft (6 yrs in NJ.
b. Appellate Division: SOL did not begin ticking
against O'Keefe until all elements of AP had been
satisfied, especially the "open and notorious"
requirement
c. NJ Sup. Ct.: Discovery rule- SOL starts running
at the time of the theft unless owner uses due
diligence to locate the article: SOL starts
running when the owner locates who has the
article or should have known who has it. The rule
rewards taking affirmative steps to locate one's
property. A substitute for AP of chattels (but a
minority rule)
d. Running of the SOL bars action for recovery and
vests good title in the possessor that relates
back to the date of the dispossession from the
true owner.
VI. The Estate system
A. 4 goals
1.What are the different names for the different possessory
estates and future interests that make up the estate system?
2. With respect to each, what language is required to create it?
a. At common law
b. In a modern jurisdiction
3. What are the legal characteristics of each
a. Duration
b. Transferability
(1) By deed
(2) By will
c. Inheritability
4. Are there any common law rules or statutes that have been
applied to defeat the owner's/transferor's intentions to
create a given estate?
B. Feudalism and the rise of the estate system
1.In 1066, Edward the Confessor, King of England, died celibate
and childless. In a controversy over whom was the heir to the
throne of England, William of Normandy (aka. William the
Bastard and William the Conqueror) invaded England. He
defeated his opponents at the Battle of Hastings, claimed the
English throne, and he subsequently expropriated all the
nobles of their land. In the redistribution of the land, the
estate system arose.
2. Reserved
3. Reserved
4. Reserved
5. A gradual enactment of statutes eroded feudalism and resulted
in the basic concepts that exist today.
a. Independent ownership of land
b. Free alienability/transferability of land
(1) Against: Parliament
(2) For: Common law courts
c. Inheritability
C. Estate: an interest in land which is or may become possessory and
which is ownership measured in terms of duration (Restatement).
D. Words of Purchase
Identify the grantee
E. Words of limitation
Identify the estate transferred
F. Words of Duration/Condition
Duration on the estate created
G. Words of termination
Describes the future interest in a defeasible estate
H. When examining conveyances, examine the words in the order in which
they appear.
VII. Possessory Estates
A. Six types of present (possessory) estates classified by duration
(Also called "freehold estates").
1. Fee Simple Absolute (FSA): The largest estate in land
recognized in our system
2. Fee Simple Determinable (FSD)
3. Fee Simple Subject to Condition Subsequent (FSSCS)
4. Fee Simple Subject to Executory Limitation (FSSEL)
5. Fee Tail (FT)
6. Life Estate (LE)
B. Fee Simple Absolute (FSA)
1. The largest, most substantial estate in land recognized by our
system
2. Legal characteristics
a. Potentially infinite/Exists indefinitely. It last until
someone does something to break it up.
b. Conveyable by deed
c. Devisable by will
d. Inheritable through the laws of intestate succession
e. Escheats to the state if no transfer, devisement, or
intestate heirs
f. NO future interests associated with it (unlike other
possessory estates)
3. How to create an FSA
a. At common law:
O -> A and his heirs [THE MAGIC WORDS!!!!]
b. Modern jurisdiction
O -> A
Legal presumption that grantor intends to transfer
his/her entire interest unless there is limiting
language.
c. The old language is no longer needed, but it is still
used
d. In older jurisdictions, the conveyance "O -> A" created
a life estate, not an FSA.
e. A's heirs take nothing from this conveyance.
C. Fee Tail (FT)
1. The FT was an old common law estate used by landed families to
keep land in the family by tying it up in a direct line of
descent.
2. Language used to create
O -> A and the heirs of his body
3. If A's line of descent runs out, then the land reverts to the
grantor or his heirs.
4. The Common law courts did not like this estate at all, and
they went through pains to work around it.
a. Initial attempt to defeat grantor's intent: Interpret
"of his body" as setting up merely a condition A must
meet in order to convey an FSA (A must have heirs
(children).
A could then turn around and convey an FSA to a
"strawman" and then have the "strawman" convey it
back to him in FSA,
b. The nobles did not like this circumvention, and so they
went to Parliament and won passage of the De Donis
Conditionalis (1285) which prohibited the Tenant in Tail
from conveying an FSA after an heir was born (enacted
the FT)
c. DDC worked for awhile, but the common law courts
eventually circumvented it too
- Barring the Entail: Tenant in tail goes into a
common law court and has the entail barred. This
action was a complete sham, as the common law
courts had no authority upon which to bar an
entail.
d. Eventually, parliament caved in and said that you can
create and FT, but the grantee can convey it to another
in FSA
5. Today, in most jurisdictions, the FT has been abolished
EXCEPTIONS:
(1) DE
(2) ME
(3) MA
(4) RI
6. How do the modern jurisdictions that have eliminated the FT
interpret a conveyance like the following:
O -> A and the heir of his body, but if A dies without heirs,
then to B
a. Minority approach: A gets a life estate, A's issue take
a remainder in FSA, and B takes nothing
b. Majority split
(1) A takes an FSA; gift over to B is void (This is
how NC treats the FT (G.S. 41-1))
(2) A gets a fee simple, and limitation over to B
takes effect iff A dies without issue at his
death (FSSEL) Rule: definite failure of issue. If
A is survived by issue, they take in FSA, and B
is CUT OUT.
c. At common law, this conveyance created a FT general with
a contingent remainder in B. If there is indefinite
failure of issue (A's line runs out), the estate goes to
B.
7. Other fees tail
a. O -> A and the heirs of his body
(General FT)
b. O -> A and the heirs if his body by his wife Sara
(FT special)
c. O -> A and the male heirs of his body
(FT male)
d. O -> A and the female heirs of his body by his wife Sara
(FT female special)
8. At CL, the Ft lasted for the life of the tenant in tail, and
then down the line of descent.
9. A could convey his interest to another, but only in a life
estate pur autre vie (measured by A's life).
10. Axiomatically, the FT was not devisable by will, for upon the
death of the tenant in tail, the possessory interest
automatically terminated and vested in the next person in the
line of descent, if there was such a person, else to the
grantor or his heirs or assigns.
D. Life Estate (LE)
1. 2 categories of life estates
a. Conventional LE's
b. Legal LE's (these have by and large been abolished)
(1) Curtesy: A widower's right to possess for life
any property owned by his wife during her
coverture provided there were heirs who could
inherit the property.
(2) Dower: A widow's right to possess for life
certain property owned by her husband during his
life.
2. Language used to create
- O -> A for life [, then to B]
- A takes the life estate
- O takes a reversion [or B takes the remainder] in
FSA
3. Legal characteristics
a. Conveyable by deed, but only the life interest
b. Devisable by will iff pur autre vie of another who had
not died yet. Otherwise, upon the death of the holder of
the life estate, the estate terminates and vests in the
grantor or the remaindermen.
c. Inheritability:
(1) At CL, if A had a LE pur autre vie of B, and B
was still alive, the first person who could get
on the land after A died got the use of the life
estate pur autre vie (General occupant rule).
[Also, take note of the special occupant rule]
(2) In modern jurisdictions, a LEPAV is inheritable
by the heirs of the grantee.
4. Disadvantages of life estates
a. DO NOT CREATE A LIFE ESTATE IF YOU CAN HELP IT! In
almost all situations a trust will be better than a life
estate. Usually the intent in creating a life estate is
to provide for someone during his or her lifetime. When
land was the primary source of wealth an prestige, life
estates made a lot of sense. But now that land is just
another commodity whose value can change rapidly, the
life estate is now essentially an anachronism.
Invariably, a trust will be a much more effective and
flexible means of providing for someone's welfare.
b. A life tenant cannot sell a FS interest in the property
without the consent of all the remaindermen, unless a
court orders otherwise.
c. Though the life tenant can lease the land, the lease
cannot extend beyond the death of the life tenant.
d. Most creditors will not accept life estates as
collateral, and consequently the life tenant will not be
able to mortgage the property.
e. Though the life tenant may use the land in a reasonable
fashion, the future interest holders have a remedy for
wasteful use.
f. The life tenant is under no duty to insure the property
or the structures on it.
g. The drafter can give the life tenant the power to sell
a FS interest or lease beyond the duration of the life
estate, but the drafter should consider what should be
done with the proceeds if the property is sold in FS
(give the proceeds to the life tenant outright or hold
it in trust for the life tenant?)
E. Restraints on alienation
1. White v. Brown and the dangers of ambiguous language
a. Possible interpretations of Mrs. Jesse Lide's will
(1) Life estate (with a remainder to the nieces &
nephews)
(2) Some sort of FS, probably an FSA
(3) FS with a restraint on alienation
b. Plaintiffs want the will construed as passing an FSA and
to regard the "to live in" and "not to be sold" language
as an invalid restraint on alienation.
c. Defendants want the will construed as passing a life
estate with a remainder vested in them. They argue the
language "not to be sold" and "to live in" clearly
manifests the testatrix's intent that the grantee take
only a life interest.
d. Rules of construction used to interpret written
documents
(1) Codified provision: A grantor passes all of
his/her interest unless he/she intends to convey
a lesser estate, either explicitly or implicitly
(2) Statutory presumption: Wills should not be
construed as creating partial intestacy unless
intent to do so is clearly manifested. The
testator/testatrix is presumed to have intended
to dispose of the entire estate. This means that
the interpretation of the will to create a LE
requires that the remainder pass by partial
intestacy, and the statutory presumption rejects
that interpretation.
e. Judge Harbison in his dissent invokes other rules of
construction to find for the defendants. Testatrix knew
how to leave her property in FSA, but she chose not to
do so. Intent of the testatrix also indicated she
intended to convey only a life interest in the property.
2. Objections to restraints on alienation
a. Makes land unmarketable
b. Perpetuates the concentration of wealth
c. Discourages improvements
d. Hardship to creditors
3. Three kinds of restraints
a. Disabling restraint- Attempted transfer is VOID
b. Forfeiture restraint- If transfer is attempted, the
transferor's interest is forfeit
c. Promissory restraint- A promise not to transfer interest
in the property (use contract remedies if breached).
4. Validity of the restraints
a. With regard to FSA's, NONE of the restraints is valid
b. With regard to LE's, b. and c. are valid, while a. is
not (if a. were valid, creditors could not reach the
estate.)
c. Exception: a partial restraint may be valid so long as
it is reasonable in purpose, effect or duration.
5. See Mountain Brow Lodge v. Toscano for more on restraints.
6. Restraints on marriage usually void, depending on the intent
of the grantor (see I.7. for broader treatment.)
F. Law of Waste
1. Baker v. Weedon
a. Plaintiff: Anna P. Weedon, third wife of the testator.
Upon his death, John Weedon left his farm to his wife in
a life estate with a contingent remainder to her
children, and if she had no children, to his own
grandchildren (He explicitly cut out his 2 surviving
daughters.)
b. Defendants: Grandchildren of John Weedon and contingent
remaindermen of the farm.
c. 1964: The state wants to build a highway through part of
the property, and so it tracks down all those with
interest and pays them off. Until that time, the
grandchildren did not know of their potential
inheritance.
d. The income Anna has been receiving from the farm has
been inadequate, and so she files suit to have most of
it sold to pay for her living expenses under the
doctrine of economic waste. The remaindermen object, but
the court orders a sale.
e. On appeal to the MS Supreme Court, the court finds that
the law of waste does not apply solely to deterioration
of the premises. Since the land was becoming valuable as
commercial property, the court finds that the
remaindermen have a substantial interest which they
stood to lose were the land sold prematurely. The court
thus articulates the necessity test and requires that
the best interests of all parties be considered in a
decision over whether or not to sell property with
future interests attached.
f. John Weedon's intent was to give his wife support during
his life: were there other options besides creating a
life estate?
(1) FSA (He probably did not want to convey to her a
FS interest)
(2) Put the land in a trust. Then she could
conceivably force the trustee to invade the
principal, sell the land, and pay her the
interest from the proceeds. She could also force
the trustee to invest the land in such a way as
to yield maximum return.
g. Life estates are usually the result of poor or no legal
advice. A trust is almost always better than a life
estate. John's lawyer probably made the mistake of not
suggesting a trust to John.
2. Most jurisdictions have statutes that authorize the sale of
land with future interests to prevent economic waste.
- In NC, the statute is G.S. 41-11
3. The law of waste can pit holders of interest against one
another
a. Life tenant vs. remaindermen
b. Cotenant vs. Cotenant
4. Definition of waste: An unreasonable use of property by the
owner of the possessory estate which unreasonably reduces the
value of the future estate. It usually involves material use
or neglect of the property that significantly reduces its
value. The holder of a vested future interest can sue for
injunctive relief.
5. Responsibilities of the life tenant
a. The life tenant must pay property taxes (statutory)
b. The life tenant is under a duty to keep the property in
good repair. (case law)
6. Considerations
- Balancing the rights of the holder of the possessory
interest vs. the owner of the future interest.
a. Nature of the property interests
b. Conduct in question
c. Remedy sought
7. Waste that harms those with contingent future interests: The
more tenuous the claim is to the property and the less certain
the interest is likely to become possessory, the less chance
you have at maintaining a successful claim for waste against
the possessory interest holder. On the other hand, the more
likely the claim will vest, the more likely the court will be
willing to grant relief.
8. 3 kinds of waste
a. Voluntary waste: Affirmative action by the possessory
interest holder which substantially reduces the value of
the land (i.e. strip mining).
EXCEPTION: Open mines rule: if the mine (or analogous
operation) is operating at the time of the grant of the
life estate, then it may be presumed the grantor
intended that the operation may continue.
b. Permissive waste: Passive action by the possessory
interest holder whereby he fails to prevent substantial
reduction in the value of the property. Relief for
permissive waste is granted less often. It will depend
on how the courts regard the obligations of the life
tenant and where the jurisdiction draws the line between
repair and improvements.
c. Ameliorative waste: Affirmative act which substantially
increases the value of the land, but which nevertheless
a use to which the future interest holder objects (i.e.
building condos on Grandma's farm which has been in the
family for generations and has tremendous sentimental
value)
Split:
(1) English rule: the future interest holder may seek
a remedy for ameliorative waste. This is based on
the old English assumption that the grantor
intended the future interest holder to receive
the property in the same condition as the holder
of the possessory interest received it.
(2) US rule: Almost universally, future interest
holders may not recover for ameliorative waste,
especially if the possessory estate is likely to
last a long time.
G. Seisin
1. The owner of a freehold estate has seisin in the property.
Prior to 1536 (The year in which the Statute of Uses was
passes), transfer of a freehold estate could only be made
through a ceremony called "livery of seisin" in which the
grantor handed the purchaser a twig, a clump of soil, etc.
which symbolized the transfer of the property.
2. Who held seisin in feudal times was extremely important, for
it determined who owed feudal incidents and to whom. Someone
had to hold seisin of property at all times; seisin could
never be in abeyance. Seisin was regarded as real in the
medieval mind.
3. Today, seisin means ownership of a freehold estate. Lessees
hold possession, not seisin.
H. Leasehold estates
1. Leasehold estates are non-freehold possessory estates. They
were regarded, and still are regarded, as personal and not
real property.
2. Leaseholds did not affect seisin: it remained in the grantor
of his designees.
3. Leaseholds are for a specific length of time, called a term of
years.
I. Defeasible fees
- FS whereby the holder of the FS can be "de-feed" if
the stated contingency occurs.
1. Generally
a. Types of defeasible fees
(1) FS determinable (FSD)
(2) FS subject to/on condition subsequent (FSSCS)
(3) FS subject to executory limitation (FSSEL)
b. All are present, possessory estates
c. The language used to create is CRITICAL! The correct
language of duration, condition as well as language of
termination must be employed in order to create the
estate intended.
d. Also, you must make the grantor's intent clear to avoid
a possible adverse judicial construction.
2. FS determinable (FSD)
a. Duration: indefinite/potentially infinite.
b. Legal characteristics
(1) Conveyable by deed
(2) Devisable by deed
(3) Inheritable by intestate succession
- but the contingency does not disappear
c. A conceptually smaller estate than and FSA: when an FSD
is created, a future interest called a possibility of
reverter (POR) vested in the grantor will be created.
[The analogous future interest created in a grantee is
called an executory interest (EI).] The fee is granted
subject to the stated contingency, and if the
contingency is breached or comes to pass, then title
automatically revests in the grantor of his heirs,
assigns, devisees, etc.
d. Conveyance of an FSD must include language expressing
the grantors intent that
(1) The estate automatically terminates upon breach
of the contingency, and
(2) That title automatically revests in the grantor
(or third party).
e. Language used to create
O -> A so long as the property is not used as offices
for the Republican party, else title shall automatically
revert to the grantor.
O -> A until ...
O -> A during such time as ...
f. Drafting error: O -> A so long as the property is not
used as offices for the Republican party.
NO LANGUAGE OF TERMINATION!!!!!!
Possible interpretations:
(1) Some courts will infer the POR
(2) Other courts will say that since no POR was
stated, none will be implied
2 further possibilities
(a) Imply a right of entry/power of termination
(ROE/POT) and deem the estate created as an
FSSCS (This interpretation requires that
the grantor take affirmative steps to
retake title: courts do not like the
automatic termination and revestment
feature of the FSD and will avoid such a
construction if at all possible.
conveyance. (The remedy for breach of the
contingency is in contract.)
(b) "Majority" rule: FSA, possibly with a
covenant depending on the
g. Alienability of the POR
Split:
(1) CL: POR is not transferable during the lifetime
of the holder, but it is inheritable (Devisable
by will? Until 1837, maybe, but after that,
Parliament enacted a statute making the POR
alienable.)
(2) US - modern approach
(a) Majority- The POR is freely alienable
(N.C.G.S. 39-6.3)
(b) Minority- Some states, like IL still follow
the CL rule.
3. FS on/subject to condition subsequent (FSSCS)
a. Similar to an FSD in that in this conveyance the grantor
imposes a condition on the transfer, but unlike the FSD,
the future interest is a right of entry/power of
termination (ROE/POT), which requires that the grantor
take affirmative steps in order to reclaim title,
usually by filing an ejectment [?] or quiet title
action.
b. Language used to create: Language of condition
O -> A but if the land is used as a landfill, then the
grantor or his successors shall have the right to re-
enter and take possession of the property.
O -> A on the condition that...
c. Drafting error: Language of condition appropriate to an
FSSCS, but no stated ROE/POT
- Majority rule (NC): Courts will not infer the
ROE/POT
(a) Some courts will interpret the conveyance
as an FSA
(b) Others will interpret the contingency as a
covenant and restrict remedies for breach
to contractual remedied (injunction,
damages, etc).
d. Duration
- The estate exists indefinitely, and is
potentially infinite.
e. Legal characteristics
(1) Conveyable by deed
(2) Devisable by will
(3) Inheritable by intestate succession
- but the condition remains intact.
f. The SOL for adverse possession starts to run as soon as
the condition in the conveyance is breached.
g. Alienability of the ROE/POT
Split:
(1) CL: ROE/POT is not transferable during the
lifetime of the holder, but it is inheritable
(Devisable by will? Until 1837, maybe, but after
that, Parliament enacted a statute making the
ROE/POT alienable.)
(2) US - modern approach
(a) Majority- The ROE/POT is freely alienable
(N.C.G.S. 39-6.3)
(b) Minority- Some states, like IL still follow
the CL rule.
4. FS subject to executory limitation (FSSEL)
a. Similar to an FSSCS/FSD, but the future interest is in
a third party
b. Language used to create
O -> A but if A ever becomes a Republican, then to B.
The same language of condition as an FSSCS, but no
language of termination and the future interest is in a
third party, B.
c. When the condition is breached, title automatically
vests in the third party (similar to FSD in this
respect.)
d. Duration
- The estate can last indefinitely, and is
potentially infinite, so long as the stated
contingency does not come to pass.
e. Legal characteristics
(1) Conveyable by deed
(2) Devisable by will
(3) Inheritable by intestate succession
- but the proviso remains intact.
f. Future interest which follows an FSSEL: Executory
interest (vested in the third party).
5. Marenholz v. County Board of School Trustees (see brief for
more details)
a. Plaintiffs: Deed created a FSD with POR, and in 1973
when classes ceased, title automatically vested in Harry
Hutton, and then they got title through Harry Hutton's
March conveyance.
b. Defendants: Deed created an FSSCS with ROE/POT. Like the
POR, the ROE/POT is not conveyable or devisable, but it
is inheritable and can be released to the holder of the
possessory interest. Harry Hutton was the sole heir of
the grantors. Harry Hutton's September release thus gave
the School Board FSA interest in the property.
c. Court: Trial court was in error in concluding that the
Marenholzs could not have gotten any interest from Harry
Hutton. The conveyance smacks of a limited grant with a
possibility of reverter (FSD), and so they might have
gotten title in the March conveyance, though the court
does not reach that issue. They also do not reach
whether or not the property is no longer being used for
school purposes or if Harry's September release
sufficiently revoked the March conveyance.
6. Moutain Brow Lodge v. Toscano and use restrictions
a. Plaintiffs: Both restrictions are restraints on
alienation and are consequently void.
b. Defendants: Deed created some sort of defeasible fee
with some sort of reversionary interest in the grantor.
c. Court's decision
(1) The deed created an FSSCS followed by a POR. [The
court gets its terminology wrong. The estate they
mean is an FSD followed by POR.]
(2) The explicit forfeiture restraint on alienation
is invalid
(3) The use restriction may indirectly interfere with
alienation of the property, but it is nonetheless
valid.
d. Public policy considerations concerning use restrictions
(1) Pro
(a) Respect the intent of the testator to
govern how his land is to be used
(b) Courts have allowed transfers to churches
and schools for church and school purposes,
respectively. If use restrictions were
banned, such conveyances would be
impossible. Allowing use restrictions thus
promotes charitable contributions.
(2) Con
(a) Effectively creates a restraint on
alienation. It limits potential buyers. In
Toscano, the only potential buyer would be
someone who is willing to be a landlord for
the lodge.
(b) Inherently short sighted. Example: property
over in RTP that cannot be developed
because of a use restriction mandating that
it only be used as a gun club.
(c) Tracking down heirs after 100 years may be
impossible [, though the heirs would
probably be responsible for showing up to
collect their cuts.]
7. Defeasible life estates
a. Most common DefLE: Defeasible upon marriage of grantee.
This restraint runs afoul of a CL policy to promote
marriage and not discourage it.
(1) If the intent of the grant is to discourage the
grantee from getting married, the restraint is
VOID.
(2) If the intent of the grant is to provide support
for the grantee until such time as the grantee
gets married, then the court may honor it.
(a) In this regard, the courts prefer the
determinably form ("so long as" rather than
conditional "but if".)
(b) Courts reluctant to interpret cohabitation
as "marriage" and more likely to interpret
the restraint literally.
b. If the condition on defeasment becomes impossible to
meet, like if the grantee of a fee dies, then the estate
becomes a de facto FSA, though a prudent lawyer would
file a quiet title action to have the restriction
adjudged unfulfillable and convert the estate into an
FSA.
8. Precatory language: Grantor attempts to create a particular
estate but fails to do because he did not use the "magic
words". The desire of the grantor is not made legally binding.
a. Language creating an FSD or FSSCS without the language
of termination. A majority of jurisdiction are likely to
rule that the grantee takes an FSA from such a
conveyance.
b. O -> A with the hope that A will always use the property
as a house of prostitution. :-)
Such a conveyance does not create an FSD, FSSCS, or even
an FSA with a covenant.
VIII. Future interests
A. Definition: A non-possessory estate that is capable of becoming
possessory. It is a present interest in that it exists now. Though
it is not possessory, it does exist and is valuable. (Buying
contingent remainders is a bit of a gamble, but you can do it.)
B. Types of future interests
1. FI's retained in the grantor
a. Reversion
b. POR
c. ROE/POT
2. FI's retained in a grantee
a. Vested remainder (VR)
(1) Indefeasibly vested
(2) Subject to total defeasment
(3) Subject to partial defeasment
b. Contingent remainder (CR)
c. Executory interest
(1) Shifting executory interest (De-fees another
grantee)
(2) Springing executory interest (De-fees a grantor)
C. FI's in grantor
1. Reversion: The future interest in an estate an owner of a
present estate retains when he transfers a smaller estate, one
that is conceptually shorter in duration than the one he
started with.
a. Types of possessory estates that have associated
reversions
(1) Limited FSA [O -> A for A] [?]
(2) FT
(3) LE w/o a vested remainder
(4) Term for years
b. Legal characteristics
(1) Conveyable by deed
(2) Devisable by will
(3) Inheritable by intestate succession
c. DO NOT talk about "possibility of reversion". That
estate DOES NOT EXIST.
d. Unless the conveyance creates a FS interest or a vested
remainder in FS, there will be a reversion vested in the
grantor.
2. POR: the future interest which follows an FSD
3. ROE/POT: the future interest which follows an FSSCS.
D. FI's in grantee
1. Remainders
a. Definition
(1) A future interest
(2) Created in someone other than the grantor
(3) Which according to the terms of its creation will
become a possessory estate, if ever, immediately
upon and no sooner than the expiration of all
[key difference from an executory interest.]
(4) Prior estates
(5) Created simultaneously with it
(6) And cannot divest any interest except an interest
left in the transferor.
b. Holder of a remainder is called a "remainderman.
c. EXCEPTION: The following conveyance does not create a
remainder:
O -> A so long as A never grows marijuana on the
premises, and if he does, then to B.
This conveyance creates an FSSEL with an EI in B.
A remainder can NEVER follow an FS estate. This
rule is a throwback to common law rule: once O
transferred an FS estate, he had nothing left to
convey. The Statute of Uses in 1536 allowed B's
interest to be conveyed (a shifting executory
interest).
d. Vested remainders (VR)
(1) A VR exists where a transferee is an ascertained
party at the time of the transfer
(2) VR's are not subject to conditions precedent.
(3) Split on the future interest this conveyance
creates:
O -> A for life, then to B for life.
(a) Modern majority: Indefeasibly vested
remainder for life
(b) Minority (Restatement): VR subject to total
defeasance for life
(4) Types of vested remainders
(a) Indefeasibly vested remainder (VRI)
- No condition precedent
- No unascertained party
- No condition subsequent (EI which
could divest it)
(b) Vested remainder subject to open/partial
defeasance (VRSOD).
(1) For those interests that can be
partially cut down or where the
persons who can take can increase
along the way. They are created in a
class of persons that is capable of
increasing in size. Notable example:
Conveyances to CHILDREN.
(2) If at the time of the conveyance
there are no grantee children to
take, then the children have a CR and
the grantor has a reversion
(3) Once the person to whose children the
grant is made has a child, that child
takes a VRSOD. If that child dies,
the child is NOT defeated; his
interest will pass to his heirs or
devisees.
(4) When the VRSOD's become possessory,
their holders take as tenants in
common.
(c) Vested remainder subject to total
defeasance (VRSTD)
- These VR's are subject to conditions
subsequent/EI's
(5) Legal characteristics
(a) Conveyable by deed
(b) Devisable by will
(c) Inheritable through the laws of intestate
succession.
e. Contingent remainders (CR)
(1) Rules of thumb regarding CR's
(a) A CR exists where a transferee is an
unascertained party at the time of the
transfer.
(b) CR's are subject to conditions precedent.
(2) If the remainderman must survive the previous
possessory estate holder simply because of the
durational character of the estate, that is not a
condition precedent.
(3) CR's do not follow VR's
(4) "If ever" language distinguishes a CR.
(5) When the future interest holder must survive the
life tenant in order to take solely because of
the durational character of the preceding estate,
the future interest is NOT a CR.
(6) If the conveyance ends in a CR, the grantor will
retain a reversion.
(7) Alternate CR's set up a condition precedent
which if satisfied vests interest in one
person or persons and if not satisfied
vests in another person or persons.
(a) A reversion will follow alternate CR's
despite the fact that it is a near
conceptual impossibility for it to become
possessory.
(b) The reason for this is an old CL rule that
a LT could forfeit his life estate for
waste. It remains possible for a LT to
forfeit his LE to the grantor for waste,
thus the need for recognizing the grantor's
reversion.
(8) Legal characteristics
(a) Majority rule: CR's are freely alienable
(1) Conveyable by deed
(2) Devisable by will
(3) Inheritable through the laws of
intestate succession
(b) Minority rule: CR's are NOT transferable
inter-vivos, though they can be inherited.
([Devisable?]) HOWEVER, the holder of a CR
may relinquish it to the holder of the
possessory estate (similar to release of
POR and ROE/POT to holder of possessory
estate.).
(9) CR's cannot become possessory until any condition
precedent is satisfied and the taking party is
ascertained.
(10) If the condition precedent can never be
satisfied, then the CR becomes a nullity and is
extinguished.
(11) A CR cannot divest an interest in a transferee,
but it can divest an interest in a transferor.
(12) Doctrine of Destructibility of CR's
(a) In jurisdictions where the rule is still
recognized, a CR must vest in interest
prior to or at the time of the termination
of the previous estate.
(b) The rule has been abolished in most
jurisdictions.
(13) Browning v. Sacrison
(a) Plaintiff was the wife of a deceased son of
the testatrix, Kate Webb. In making out her
will, Kate expressed her desire that none
of her property ever fall into the hands of
her daughter's ex-husband Clyde. Since it
was possible for her 2 minor grandsons,
Robert and Frankie, to die intestate before
their majority, she made out her will
devising a certain tract of property to A
for life, "with remainder over at the death
of [A]...to my grandsons Francis...and
Robert...,or if either of them be dead,
then all to the other..."
(b) After Franklin's death, Franklin's wife
filed an action to have KW's will construed
as to have created a vested remainder in
her husband. She argued the preference for
early vesting construction should control.
Defendants argued that the remainder was
conditional upon surviving the life tenant.
(c) Though the court acknowledged the
preference for early vesting rule of
construction and retaining it despite signs
of its erosion in the law, it invoked other
rules of construction:
(1) Use of construction commonly
prevalent among similarly situated
conveyors: Normally when a conveyor
uses language requiring an "ambiguous
form of survivorship," the testator's
intent is presumed to be that the
remaindermen survive the life tenant
rather than the testator.
(2) Apt language rule: By examining the
other conveyances in the will, it is
apparent that the testatrix knew how
to create a given interest, and by
not using the same language in the
questioned conveyance, the court may
presume she did not intend to create
the same interest as she created in
the other conveyances. "At the time
of my death" language is absent from
questioned conveyance.
d. The Appellate Court affirmed the trial
court's ruling that the conveyance created
a CR in Franklin that required he survive
the life tenant before the interest would
vest. The court reasoned that this
interpretation best comported with the
testatrix's intent to cut out Clyde.
f. Why is the distinction between vested and contingent
remainders important?
(1) Taxes: Vested remainders are subject to Federal
Inheritance taxation upon vestment. If at all
possible, make remainders conditional upon
surviving to the death of the life tenant or
until the end of the term of years
(2) CL rule concerning the destruction of CR's des
not apply to vested remainders
(3) CR's are subject to the Rule against Perpetuities
(4) Each has different legal characteristics
(5) CR's have conditions precedent, not vested
interest
(6) Law of Waste: discounted influence of contingent
remaindermen in pressing claims for waste. The
less likely the interest is to vest, the less
likely the court is likely to grant relief.
g. Rules concerning class closing: Principally applicable
to VRSOD's.
(1) The class closes when the interest becomes
possessory (Rule of convenience) or when no more
members can be added to the class: Court prefer
early vesting.
EXCEPTION: If you are born within 10 lunar months
of the closing of the class you are considered a
member of the class. (This rule applies in NC)
2. Executory interests
a. Definition: A future interest created in a third party
which is not a remainder and which takes effect by
springing into possession or by shifting from one person
to another. EI's become possessory by divesting existing
estates.
b. Two types of executory interests:
(1) Springing executory interest: divests an estate
in the grantor.
(2) Shifting executory interest: divests an estate in
a grantee.
- Why does the difference between EI's and POR's
matter?
- The Rule against Perpetuities requires that
any future interest in a transferee become
vested within the time of some life in
being at the time of the conveyance plus 21
years in order to be valid. Future
interests created in transferor are not
subject to the RAP.
c. Prior to 1536, three CL prohibitory rules existed
(1) No springing future interests (freehold estate
springing up from grantor)
(2) No shifting future interests (cutting short a
freehold estate)
(3) Strict adherence to requirement of livery of
seisin by CL courts.
d. Prior to 1536, there were a few ways to avoid the
stringent rules laid down by the common law courts,
especially the requirement of livery of seisin.
(1) "Use" or "Trust" device
The grantor would create a legal estate by
enfeoffment
O -> X & his heirs to hold to the use of O's
eldest son A & his heirs, but if A inherits the
use of the family manor, then to the use of O's
second son B & his heirs.
X held seisin in trust for the beneficiary.
(a) The use was a tax evasion device because is
caused feudal incidents not to be paid.
(Seisin passed by purchase and not through
inheritance, and feudal incidents were
collected only when seisin passed by
inheritance.)
(b) The CL courts refused to recognize such a
transfer (X had an FSA)
(c) However, the equity courts "did the right
thing" and enforced the trust and required
X to perform his fiduciary duties. Thus,
the equity courts could be used to enforce
"shifting" and "springing" uses in defiance
of the CL courts.
(d) Henry VIII began to run short of money
after his break with Rome. Parliament did
not want to raise taxes, nor did the king
want to anger the public. So, he resolved
to begin collecting feudal incidents that
were being so cleverly avoided. In 1536,
Henry VIII pushed the Statute of Uses
through Parliament in order to dispense
with the evasive devise of the use.
The Statute of Uses "executed" a use by
stripping the trustee of seisin and vesting
it in the beneficiary, or the cestui que
use, thus converting the use into a legal
interest.
(e) The Statute of Uses created two new future
interests: shifting and springing executory
interests. This made it legal to do what
formerly could only be done equitably.
(f) Though for a short time in the wake of the
Statute of Uses primogeniture could not be
avoided, Parliament passed the Statute of
Wills in 1540 which permitted landowners to
avoid primogeniture through devises of
land.
(2) Bargain and sale deeds
(a) This device was used to avoid the need for
livery of seisin ceremony.
(b) The CL courts refused to acknowledge that
seisin had transferred, but the equity
courts held that the grantor held legal
title for the benefit of the grantee in a
sort of use.
(c) The Statute of Uses made these deeds
legally valid, and eventually the
advantages of deeds over livery of seisin
became clear. The SOF was enacted in 1677
abolishing livery of seisin and requiring a
written instrument to pass title to land.
3. Trusts
a. Trusts are a flexible form of property ownership and
management where the benefits of property ownership are
separated from the burdens of property management.
b. Trusts split title
(1) Legal title vests in the trustee
(2) Equitable title vests in the beneficiary
c. The trustee is a fiduciary who is held to the highest
standard of conduct. Trustees hold the land for the
benefit of the beneficiary subject to the terms of the
trust. The trustee is under a duty to administer the
property for the sole benefit of the beneficiary. He
must invest it properly, preserve it, and dispose of
income from the property according to the terms of the
trust. Mismanagement of the trust give the beneficiary
a cause of action against the trustee.
4. Valuation of future interests
a. If the interest/estate is transmissible, then it is
taxable.
5. Rules of construction: heuristic devices/ROT's courts use to
give construction to conveyances where the grantor's intent is
not clear. (From Browning v. Sacrison)
a. Preference for early vesting of remainders.
(1) Promotes alienability of land. Vested remainders
are certain to vest in possession. Contingent
remainders are analogous to lottery tickets.
(2) Early CL courts were not fond of CR's
b. Use construction commonly prevalent among similarly
situated conveyors.
c. Apt language rule of construction: look at other
language in the will. If the testator knew how to create
a given estate and she used that language elsewhere and
did not use it in the questioned conveyance, then the
court may presume that she did not intend to convey the
same estate.
6. Seisin
a. At CL, seisin represented who owned the land. It was the
key characteristic of a freehold estate.
b. Before 1536, seisin could only be transferred by a
quaint ceremony known as "livery of seisin" where the
grantor and grantee went upon the property being
conveyed, and the grantor handed the grantee a clod of
dirt, a twig, etc. before witnesses. This symbolized the
transfer of seisin.
c. Who held seisin was of fundamental importance in the
feudal era, for seisin determined who owed feudal
incidents.
d. Seisin could NEVER be in abeyance.
- Before 1536, this conveyance would have been
invalid:
O -> A for 10 years, then to B if B is living.
Because a CR followed the term for years, seisin
would have been in abeyance.
Additionally, since seisin did not pass from O to
B, and since A could not take seisin, this
conveyance would mean a freehold estate would
simply "spring up" in the future, and CL rules
prohibited this.
Most courts today would probably call B's
interest a CR.
e. Today, seisin means "possession of a freehold estate."
Lessees do not have seisin.
D. Rules furthering marketability of land/alienability of future
interests
1. Overview
a. Rule in Shelly's case (RSC)
O -> A for life, then to the heirs of A
b. Doctrine of Worthier Title (DWT)
O -> A for life, then to the heirs of O
c. Doctrine of Destructibility of CR's
d. Rule Against Perpetuities (RAP)
- When any of these operate, they obliterate future
interests.
2. Rule in Shelly's Case
a. Four elements
(1) In the same instrument, and
(2) A freehold estate (usually a LE) is granted to
one person (NOT A LEASEHOLD!!!), and
(3) A remainder in FS or FT is granted to the heirs
(in the technical sense of intestate succession)
of that same person, and
(4) The interests are BOTH legal or BOTH equitable
b. If all 4 elements are satisfied, then the limitation
over to the heirs is VOID and the interest instead is
given to the holder of the freeholder estate.
c. Doctrine of Merger
- After the application of RSC if one person holds
both the present estate and the future interest
and there is NO intervening estate, then the
ancestor takes an FSA (or FT).
d. RSC applies even where there are intervening estates,
though the doctrine of merger may not apply.
e. RSC is a rule of law: it applies regardless of the
transferor's intent.
f. NC abolished RSC by statute in 1987 (GS 41-6.3)
g. Typical conveyance subject to RSC
O -> A for life, then to the heirs of A
After applying RSC, A would hold both the life estate
and a VRI, which then merge under the doctrine of merger
into an FSA.
3. Doctrine of Worthier Title
a. This rule applies when a transferor attempts to convey
a freehold estate to one person and a remainder to the
grantor's own heirs.
b. Two branches
(1) Inter vivos branch (Deeds): This branch is still
active where DWT is still recognized.
(2) Testamentary branch (Wills): This branch is a
quaint anachronism which made sure that the heirs
of a grantor took not as purchasers but as heirs.
For instance, suppose O devises Zagyo-So to A for
life, then to the heirs of O. DWT would strike
the limitation over to O's heirs leaving a
reversion to pass to O's heirs by intestate
succession (feudal incidents arose when land
passed by inheritance but not by purchase). But
since it no longer matters is the heirs take as
purchasers or by intestate succession, this
branch no longer serves a purpose in our property
law.
c. DWT is a rule of construction which can be abrogated by
the manifestation of contrary intent by the transferor.
d. NC abolished DWT in 1979 (GS 41-6.2)
4. Doctrine of Destructibility of Contingent Remainders
a. At CL, someone had to be seised of land at all times. In
addition, the CL courts favored free alienability of
land. In order to further these two interests, the CL
judges developed a rule:
- Remainder in land is destroyed if it does not
best prior to or at the destruction of the
previous estate.
b. A CR could be destroyed in 2 ways
(1) Not having a condition set up for taking at the
expiration of the previous estate
(2) Artificial termination of the previous estate
(a) Forfeiture of LE
(1) Failure to perform feudal obligations
(2) Tortious conveyance (purporting to
transfer a greater estate than what
you have.)
(3) [Waste?]
(b) Transfer/merger
- CL courts did not treat CR's as
intervening estates (It was not
prestigious in the eyes of the CL
courts to have a CR.)
c. The doctrine did not apply to EI's
d. In modern times, this doctrine has been abolished in
England and in most of the US either by statute,
judicial decision, or just plain atrophy. CR's are not
covered by the RAP.
e. In jurisdiction where the doctrine has been abolished,
a CR that does not vest upon the expiration of the
previous estate turns into an EI against the grantor's
reversion, which is not a FSSEL.
5. Rule Against Perpetuities (RAP)
a. This rule arose out of a desire of the CL courts to keep
the landed aristocracy from exercising excessive dead
hand control over their property by tying it up with
contingent future interests and executory interests for
inordinate periods of time.
b. The rule arose out of the Duke of Norfolk's Case where
a compromise was struck between the CL courts and the
landed aristocracy who wished to exercise some dead hand
control over their property.
c. The rule is aimed at
(1) CR's
(2) EI's
It does NOT apply to future interests created in the
transferor, that is, POR's, ROE/POT's, or reversions.
d. John Chipman Gray's articulation of the rule:
"No interest is good unless it must vest [in interest],
if at all, not later than [21] years after some life in
being at the time of the creation of the interest."
(a) The interest MUST vest within 21 years after some
life in being
(2) If it is possible for the interest to vest
outside the perpetuities period, the interest is
VOID from the time the conveyance is made.
Probabilities are not relevant.
e. Vesting in interest (no unascertained party or condition
precedent) as opposed to vesting in possession: these
two do not necessarily occur at the same time, but only
the first matters as far as the RAP is concerned.
f. The RAP applies to
(1) Real property
(2) Personal property (including trusts)
g. The rule addresses vesting of future interests, not the
number of future interests.
h. Time limit = time of creation to time of vesting.
= measuring life + 21 years
g. The life in being may be a member of a class who
survives the longest so long as that class is reasonable
in size. (A class of 120 measuring lives has been found
to be reasonable.)
Limitations
(1) Reasonably ascertainable persons
(2) Can determine when they die.
A conveyance can be invalidated for indefiniteness of
either the above categories.
h. The RAP is supplemented by the gestation period (10
lunar months)
i. Common traps laid by the RAP
(1) ***STRONG to conclusive presumption that a person
can bear or beget children until the day she/he
dies.
Jee v. Audley: The case of the "fertile
octogenarian"
(a) T -> $1000 to W for life, then to Mary and
the issue of her body, and in default of
such issue to the daughters then living of
John and Elizabeth Jee.
(b) Mary is in her 40's and unmarried with no
children. The Jee's are in their 70's. The
daughters of the Jee's file a bill in
equity to get Mary to post a bond of $1000
to make sure she does not spend the money
(c) Lord Kenyon gets around the request by
declaring the limitation to the daughters
void under the RAP.
(1) FT cannot be created in personal
property, so Mary took a "FSA" in the
money.
(2) Lord Kenyon nonetheless
interpreted the failure of
issue language to mean
indefinite failure of issue.
(3) Under that interpretation, the
interest could vest outside the
perpetuities period. (This required
Lord Kenyon to make the ludicrous
assumption that the Jees could have
children until the day they died.
(d) Constructional escapes from Lord Kenyon's
decision.
(1) Definite failure of issue
(2) Construe the will to mean daughters
living at the time of T's death (T
specified "daughters" as opposed to
"children". Also, the Jees were 79
years old!)
Lord Kenyon made no effort to carry out the
testator's intent.
(2) Case of the "unborn widow"
O -> A for life, then to A's widow for her life,
then to A's children who are then living.
(3) Case of the "slothful executor" (Slack executor)
T -> my issue living upon the distribution of my
estate."
(4) Case of the "magic gravel pits"
T -> gravel pits to trustees to work out, and
when they are worked out to sell them and divide
the proceeds among T's issue.
j. Effect of the RAP on an interest that is not in
accordance with it.
(1) Violating interest is stricken
(2) Rest of conveyance reads as if invalid interest
was not there.
k. Ameliorative doctrines to the RAP
(1) Wait and see doctrine: An ameliorative doctrine
whereby an interest that can vest outside the
perpetuities period is not automatically declared
void, but rather "we" "wait and see" if the
interest vests or not (usually within some time
period like 90 years)
(2) Cy pres: Under this doctrine, a court may reform
a conveyance with an interest that violates the
RAP to bring it into conformance with the RAP
while respecting the intent of the transferor.
(3) Statutory provisions taking care of the most
common pitfalls the RAP lays.
(4) Saving clauses in trusts ensuring that the
trust will vest or terminate within the
perpetuities period.
l. Brown v. Independent Baptist Church of Woburn
(1) T -> H for life, then to the church so long as
the property is used for church purposes, if not,
then to the 10 legatees.
(2) Testatrix's husband died in 1864. The church
ceased to continue as a church in 1939 when the
last member died.
(3) Everyone admits that the conveyance created an EI
violative of the RAP in the legatees. After the
rogue interest is struck, an FSD is left [Court
here implies a POR while other courts would
not.]. However, the parties are in disagreement
about where the POR left by the remaining FSD.
(4) Court holds that the POR passed under the
residuary clause to the 10 legatees instead of
the heirs of the testatrix outside the will. The
court permits the simultaneous creation and
transfer of a POR in the grantor to the legatees.
(Same effect as the EI.) [This conclusion is
silly as a matter of policy.]
m. Certified Corp v. GTE Products
(1) Defendant gave an option to purchase real estate
to plaintiff's corporation. The option purported
to be good for 25 years.
(2) The court stamps it violative of the RAP, holding
that since the option did not specify any
measuring lives, the option could only be good
for 21 years or it was void.
n. Steps in solving an RAP problem: The RAP is a rule of
logical proof.
(1) Locate all persons capable of affecting vesting
of the interest. All other lives are irrelevant.
- The measuring lives need not be mentioned
in the conveyance.
(2) Test each life to see if the interest will vest
or fail within that life of 21 years afterwards.
If you find a life that meets the RAP
requirement, you have found the measuring life.
(3) If none of the lives meet the RAP requirement,
then the contingent interest is void unless it
must vest of fail within 21 years.
E. NC statutes relating to future interests
1. GS 41-4: All contingent future interests made dependent on a
person dying without heirs (or heirs of the body) or issue (or
issue of the body) or without children or offspring, or
descendant, or other relative shall be interpreted as definite
failure of issue (at the time of the person's death or within
10 lunar months of person's death), unless the grantor clearly
expresses a contrary intent. This is a rule of construction
and does not apply to deeds or wills executed before 15-JAN-
1828.
2. GS 41-5: A gestating infant is deemed a person capable of
taking by deed or other writing any estate just as if he were
born.
3. GS 41-6: A limitation over to the heirs of a living (NOT
dead) person shall be construed as to the children of that
person, unless the grantor expresses a contrary intent.
4. GS 41-6.2: DWT is abolished
a. As a rule of law
b. As a rule of construction
Effective 1979.
5. GS 41-6.3: RSC abolished; effective 1987.
F. Steps in solving a future interest problem
Is the future interest one in the grantor or grantee?
If it is in the grantor, then it must be a POR if the
preceding possessory estate is a FSD or a ROE/POT if the
preceding estate is a FSSCS.
If the future interest is in a grantee, then it must either be
a Remainder or an Executory Interest
If the interest stands ready to become possessory
immediately upon the expiration of the natural
termination of the preceding estate, then the interest
is a remainder.
If the interest tends to cut short a possessory estate
(usually through a condition subsequent), then the
interest is an EI.
If it is a remainder, is it vested or contingent
If there is an
Unascertained party, or
A condition precedent
Then the interest is a CR.
If there is an ascertained party in the interest and no
condition precedent, then the interest is a VR.
If the interest is a VR, then it is
An indefeasibly vested remainder (VRI) if it cannot be
terminated by an EI or decreased in size by the addition
of members to the class.
No condition precedent
No unascertained party
No condition subsequent
A VR subject to open defeasance (VRSOD) if the takers'
shares can be reduced by the addition of members to the
class.
A VR subject to total defeasance if it is subject to an
EI.
If the interest is an EI, then
If it tends to divest an interest in a grantee, then it
is a shifting EI.
If it tends to divest an interest in a grantor, then it
is a springing EI.
G. Rules of construction for conveyances where the grantor's intent is
ambiguous.
1. If the language of condition taken alone would create a VR and
it looks like another future interest was just tacked on,
then it is a VR subject to executory limitation (VRSTD)
Ex: O -> A for life, then to B, but if B does not graduate
from law school, then to C.
B has a VRSTD
C has an EI
2. If the language of condition appears to be part of the
description of the remainderman, then its a CR.
IX. Concurrent estates
A. Three forms of concurrent ownership
1. Tenancy in common
2. Joint tenancy
3. Tenancy by the entirety
B. Tenancy in Common
1. Legal characteristics
a. Each cotenant has the right to possess the whole
property.
b. Each cotenant holds a fractional undivided interest in
the property.
c. It is possible for the TIC's to hold different shares of
the interest.
d. Each cotenant's interest is freely alienable.
(1) Conveyable by deed
(2) Devisable by will
(3) Inheritable through the laws of intestate
succession.
2. Modern Majority Rule: Preference for tenancy in common.
Ambiguous conveyances are interpreted as tenancy in common
with each cotenant taking a proportionate undivided interest
3. Cotenants who cannot work out their problems file an action
for partition.
(1) Partition by kind (physical partition)
(2) Partition by sale (sell the land and divide the
proceeds)
4. TIC requires only that the unity of possession remain intact.
C. Joint Tenancy
1. JT was originally a common law device used to avoid taxation.
By common law fiction, the joint tenants were treated as one
party.
2. When one JT dies, the other(s) have automatic right of
succession: the interest of the expired JT is extinguished in
favor of the other cotenant(s).
2. The CL preferred joint tenancy over tenancy in common, so
ambiguous conveyances were resolved in favor of joint tenancy.
3. Each JT has the right to possession of the entire property.
4. Each JT holds a equal undivided interest.
5. Four unities: For a joint tenancy to be created and to
continue, the four unities must be intact. (P.I.T.T.)
a. Possession: Each JT has the right to possess the whole
of the property, though one JT may voluntarily give
exclusive possession to another JT.
b. Interest: All JT's must have equal, undivided shares and
identical interests measured by duration.
c. Time: The interest of each JT must be acquired or vest
at the same time.
d. Title: All JT must acquire title by the same instrument
or by joint adverse possession. JT can never arise
through intestate succession or other act of law.
At CL, an owner of property could not create a JT
in himself and others. He had to convey the
property to a strawman and then have the strawman
convey the property back to the grantor and his
intended joint tenants. Otherwise, the unities of
time and title would be missing.
Severance by secret deed
H and W own as JT's
H -> H by secret deed
(a) If H is the first to die and he has not
recorded the deed, JT is not severed.
(b) If W is the first to die, then the deed
will be enforced and interest will pass to
W's heirs or devisees.
Riddle v. Harmon
(1) In this case, a wife upon learning that she held
property with her husband as a JT and that he
would take the whole of the property upon her
death, attempted to terminate JT by conveying to
herself as a JT to herself as a TIC, thereby
severing JT. She then executes a will devising
her property. She died some 20 days later.
(2) At CL, a strawman was required to do what she
wanted to do. The husband argues on the basis of
an App. Ct. decision that a strawman was
required.
(3) The Appeals Court reverses the trial court in
holding that the unilateral "loopback" conveyance
was sufficient to sever JT.
Today, courts are not as strict about requiring a
strawman to create or terminate a JT. In fact,
many jurisdictions have abolished this
requirement by statute or judicial decision.
6. In NC, JT with automatic right of survivorship is abolished
(G.S. 41-2), but you can still create a JT, but the creation
of JT must be explicit and unambiguous (and verbose!) in
expressing a contrary intent of the grantor.
O -> A and B as joint tenants with right of survivorship and
not as tenants in common.
7. Legal characteristics
(a) A JT can convey her interest, but once she does, JT is
severed. At JT may convey her interest without notice to
the other JT's, but in some jurisdictions the deed must
be recorded in order to be enforceable against the non-
transferring party.
(b) The interest of a JT is NOT devisable or inheritable.
Because of the automatic right of survivorship, once the
JT dies, her interest is extinguished.
(c) Liens may be attached to the interest of a JT, but it
may sever JT in some jurisdictions.
Harms v. Sprague
(1) William and John Harms took a certain piece of
property as JT's. Some years later, a friend of
John's, Charles Sprague, asked John to cosign
with him on a note and to give a mortgage to the
owners, the Simmonses, of a piece of property
Spague wished to buy. William knew nothing of
these transactions.
(2) John died testate, devising everything to Charles
Sprague. William sued the Simmonses (holders of
the mortgage) and Sprague (presumably to quiet
title in him).
(3) Does a mortgage by one JT sever joint
tenancy?
2 theories of mortgages
(A) Lien theory: Mortgagee takes no title to
the property, only a lien.
(B) Title theory: Mortgagee acquires title and
retains it until debt is paid.
- IL follows the lien theory of mortgages, so
the mortgage did not affect JT. When John
died, his interest was extinguished and
William took title to the whole of the
property through the automatic right of
succession.
(4) Did the mortgage survive John's death?
Ct.: NO. Since John's interest is now
extinguished, any lien against it has been
extinguished as well.
- On appeal, the Simmonses cited a statute
that indicates a lien survives the death of
a JT, and the other JT's take subject to
that lien. However, the court weasels out
of applying this statute by ruling that
since the defendants did not bring up the
issue at trial they waived the issue. But
through specious reasoning they conclude
that even if they did apply the statute,
the lien still would have disappeared with
the interest. They, in effect, applied the
extinguishing doctrine with a vengeance.
(5) Is it fair for lender's lien to be extinguished
at the death of the JT whose interest the lien is
against? As a lender, this does not seem fair.
However, allowing 1 joint tenant to take out a
mortgage is just as risky as allowing a life
tenant to take out a mortgage. The moral is to
make sure you have the signatures of all JT's
before you give a mortgage.
(c) Leases do not affect JT, and lease expires upon the
death of the lessor JT.
(d) In jurisdictions where TBE is not recognized
Maj: Divorce does not sever JT.
D. Tenancy by the entirety
1. Similar to JT, but with the addition of 5th unity: marriage.
2. TBE can be created only in a married couple. The husband and
wife must be married at the time of the conveyance.
3. Legal characteristics
a. Automatic right of survivorship
b. Neither party may unilaterally convey his or her
interest and thereby sever TBE. Both signatures are
required to effect a transfer.
c. Creditors cannot reach the interest of 1 tenant, but
they can reach the interest of both (on a joint debt).
d. Not conveyable inter vivos
e. Not devisable or inheritable.
4. Termination of a TBE can be effected by
a. Both parties signing to convey the interest.
b. Divorce (converts TBE into TIC).
5. In NC, where TBE is still recognized, a conveyance to husband
and wife is presumed to be in TBE unless a contrary intent is
manifested.
6. TBE has been abolished in many jurisdictions.
E. Partition
1. Cotenants who cannot work out their problems can file an
action for partition.
a. Partition in kind: the land is physically divided and
doled out to the cotenants according to their
proportionate shares.
b. Partition by sale: The land is sold and the proceeds
divided among the cotenants according to their
proportionate shares.
2. Johnson v. Hendirckson
a. Henry and Katie were a married couple with three
children Grace, Arthur, and Vernon. Henry owned the
parcel of land upon which they were living, and upon his
death, the property passed by intestate succession to
his wife (1/3) and to each of his children (2/9 each).
Some years later, Katie married Karl Hendrickson and
they had two children Kenneth and Karroll. Katie died
testate, leaving her 1/3 to Karl (1/6 plus homestead
rights), Kenneth (1/12), and Karroll (1/12). The three
original children filed an action for partition by sale,
and the Hendricksons objected.
b. The Hendricksons preferred partition in kind, and though
collectively they were entitled to a 1/3 of the
property, they offered to settle for a 1/4 of the land
adjacent to land they owned outright. Since this
property was farmland, the whole of it was worth more
than the sum of its parts. The court denies partition by
kind: adjacent land is irrelevant in either type of
partition action.
c. Next, the Hendrickson's offered to pay owelty to the
other cotenants in order to take the more valuable 1/4.
However, since the court decided to deny partition in
kind, and owelty can be paid only in those situations,
owelty is not warranted.
d. The Hendricksons then offer to buy out the other three
children. Though the court would prefer these parties to
settle and would not be adverse to a settlement under
those terms, the court rules that it cannot make the
parties settle on those terms, and so refuses to make
the three children settle. Besides, the public auction
would be more likely to fetch the true value of the
land.
e. The Hendricksons then argue that if there is to be a
public sale, they are entitled to compensation for the
improvements made to "their" 1/4. The court denies
contribution, arguing that all lived there and all made
improvements.
f. Karl then asserts his homestead rights (life estate in
a widow/widower) and demands partition in kind. In
denying partition in kind, the court states that
homestead rights cannot be asserted in a partition if it
would prejudice the other cotenants (by breaking up
valuable acreage.). However, he is entitled to the value
of the homestead.
F. Rights and duties among cotenants.
1. Right of possession
a. In all forms of concurrent ownership, each cotenant had
(1) An undivided interest in the entire property.
(2) Right to possess the entire property subject to
the rights of other cotenants.
b. The right to possession of the entire property is ripe
for disputes (over houses, for instance)
c. Rights of dispossessed cotenant/ousted cotenant
- Damages for time of dispossession (lost rental
value)
*** If ousted cotenant takes no action, he/she then
runs the risk of adverse possession!!!!
2. Rents and profits
a. If a cotenant receives profits and rents from third
parties for use of the property, the cotenant is
required to account to the other cotenants for the
proceeds by giving them their cut.
b. Cotenants do not have to pay rents to other cotenants
(in absence of an agreement to the contrary).
c. Cotenants do not have to account for profits from their
own use of the property subject to the restrictions on
waste.
4. Taxes, mortgage payments, and other carrying charges
a. If no cotenants are in possession and 1 cotenant pays
more than his share of taxes, he is entitled to
contribution from the other cotenants.
b. If a cotenant is in possession and pays taxes, no right
of contribution from other cotenants.
5. Repairs
a. As a general rule, A cotenant who makes necessary
repairs is NOT entitled to contribution absent an
agreement requiring otherwise.
b. But if a cotenant makes repairs and then rents the
property to a third party, then he may seek repair
contribution from the other cotenants (Deduction from
rents & profits accruing to other cotenants.)
6. Improvements
a. If a cotenant makes improvements without agreement to
share in the costs, there is no right to contribution.
- This keeps rich cotenants from "improving out"
other cotenants by making lavish improvements and
then demanding contribution.
b. If a cotenant makes an improvement and then rents the
property, the improving cotenant may be entitled to
contribution if he can prove the improvement raised the
rental value of the property.
c. Partition in kind: If 1 cotenant makes an improvement,
the court will try to give that cotenant the chunk with
the improvement if doing so will not prejudice the other
cotenants.
d. Partition by sale: Though the improving joint tenant
cannot be compensated for the cost of the improvements
through a partition by sale, he can be compensated for
the increased value of the property as a result of the
improvement.
7. Fiduciary duties
a. Cotenants stand as fiduciaries or quasi-fiduciaries to
the other cotenants, especially when the cotenants are
relatives. They are thus under duties of trust and
confidence imposed by law.
b. Tax or foreclosure sale
- If one cotenant buys it back, he buys it back for
the other cotenants provided the other cotenants
are willing to reimburse the purchasing cotenant
for their shares.
- Collusive attempts to evade the above procedure
are prohibited.
8. Swartzbaugh v. Simpson
a. Mr. and Mrs. Swartzbaugh owned a parcel of land covered
with walnut trees as joint tenants. A boxing promotor
showed up one day and expressed an interest in leasing
a portion of the property to erect a boxing pavilion.
While Mr. Swartzbaugh agreed to a lease of 4 acres, Mrs.
Swartzbaugh flatly refused to give her blessing. A few
months after Mr. Swartzbaugh and Sampson concluded the
lease, Mrs. Swartzbaugh sued to have the lease
nullified. The trial court held the lease to be valid,
and the appellate court affirmed.
b. As a JT, she is entitled to possess the entire property,
and her husband's lease does not affect her right to
possession.
c. She would be entitled to collect rent from Sampson only
if he prevented her from possessing the 4 acres. But if
he allows her to exercise her right to possess the 4
acres, that is, not ousting her, she has no right to
collects rents from him.
d. However, her husband is required to account to his wife
for 1/2 of the rents because of their status as joint
tenants.
e. She could also ask for partition by the court in a worst
case scenario.
f. If the two had owned the property as TBE, the
lease would have been invalid unless both had
signed it.